China is set to cut export incentives on close to 3,000 different products, including active pharmaceutical ingredients, beginning this month, according to PharmAsia News.

The Ministry of Finance and the State Administration of Taxation cut the tax rebate rate 13 percent to 5 percent for some API’s as of July 1. As a result, prices of most APIs have already gone up. These include antipyretic and analgesic categories such as paracetamol, aspirin, ibuprofen, quinolones of ciprofloxacin, levofloxacin, citric acid and cortical hormones, perindopril and losartan categories, synthetic statins and sulfonamides. In addition, antibiotics for animal use and plant extracts also came under the cut.

At a press conference last month, a Ministry of Finance official told reporters that the reason for the cuts was excessive trade surplus and excess liquidity. “The trade surplus has grown too fast,” said the official. “This not only intensifies trade friction but it increases the domestic liquidity surplus and adds to the pressure to revaluate the yuan.”

However, the price rise has not been across the board. “Not all API product prices are increasing,” Wu Huifang, a senior analyst with Orient Health Ecommerce Ltd. in Beijing tells PharmAsia News. “Only the larger market share products have gone up, like penicillin G and vitamin C. The prices of products with high costs and no technical advantage might actually go down.”